Staff Reporter Islamabad
After closing the last week in green, gold’s near-term outlook remains bullish and the majority of experts see gold trading above its current level by the end of August.
During this week, the ISM will release the Manufacturing PMI report for July on Monday.A reading above 90 could revive inflation concerns and help the US dollar gather strength. The same goes for the ISM’s Services PMI report, which will be published on Wednesday.
On Thursday, the weekly Initial Jobless Claims will be the only data featured in the US economic docket. On Friday, the US Bureau of Labour Statistics will publish the Nonfarm Payrolls data for July.
A stronger-than-expected reading could cause investors to price a hawkish policy outlook and lift the US dollar against its peers and vice versa.
Following the decline of last Friday, the Relative Strength Index (RSI) indicator on the daily chart retreated to 50, pointing to a loss of bullish momentum.
Additionally, gold closed the week below the critical 200-day SMA after rising above that level on Thursday, suggesting that buyers are struggling to remain in control.
In the near term, gold seems to be poised to move sideways between the 100-day SMA and 200-day SMA but the market reaction to Friday’s US jobs report could cause it to break out of that range.
On the upside, the initial resistance is located at $1,820 (200-day SMA) ahead of $1,830 (50-day SMA) and $1,845 (static level).
Supports, on the other hand, are located at $1,810 (20-day SMA), $1,800 (100-day SMA, psychological level, Fibonacci 50% retracement of the April-June uptrend) and $1,790 (July 23 low).